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June
1,
2001
His Excellency Mr. Abdoulaye Bio-Tchan
é
Ministre des Finances et de l’Economie
Ministère des Finances et de l’Economie
Cotonou
Republic of Benin
Re:
Japanese Grant for the Implementation of the Social Fund Project
(Credit No. 3073 BEN)
Grant No. TF026733
Excellency:
I am writing on behalf of the International Development Association
(IDA)
to
indicate IDA’s agreement, as administrator of grant funds provided by Japan, to make a
grant in an amount not exceeding two hundred forty thousand US dollars
(US$240,000) 
(the Grant) to the Republic of Benin (the Recipient).
The Grant is made in response to the Recipient's request for financial
assistance and for the purposes and on the terms and conditions set forth in the Annex
to this Letter Agreement.
The Recipient represents, by confirming its agreement
below, that it is authorized to contract and withdraw the Grant for the said purposes
and on the said terms and conditions.
Please confirm your agreement with the foregoing, on behalf of the Recipient, by
signing, dating, and returning to us the enclosed copy of this Letter Agreement.
Upon
receipt by IDA of the copy of this Letter Agreement countersigned by you, this Letter
Agreement will become effective as of the date of the countersignature.
Very truly yours,
INTERNATIONAL DEVELOPMENT ASSOCIATION
By
/s/
Antoinette Sayeh
Country Director for Benin
Africa Region
AGREED:
REPUBLIC OF BENIN
By
/s/
Abdoulaye Bio-Tchané
Minister of Finance
Date: June 26, 2001
ANNEX
Purposes, Terms, and Conditions of the Grant
1.
Purposes and Activities
1.1.
The purpose of the Grant is to assist the Recipient in the implementation of the 
Social Fund Project
(Credit No. 3073 BEN) (the Project), which has as main objectives 
to alleviate poverty and support human and social capital development through
provision of financial and technical resources to support community initiated
activities.
The activities
(the Activities) for which the Grant is given are as 
follows:
(a)
Development of a methodology for gender and poverty targeting through the 
carrying out of: (i) an analysis of the impact of the Project by gender and level of 
poverty; and
(ii) the reform of Project procedures to improve targeting and 
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participation of women and the poor
.
The estimated cost of this component is
US$184,000. 
(b)
Development of a methodology for the evaluation of the environmental 
assessment through: (i) the carrying out of the examination of the efficacy of present 
environmental assessment procedures under the Project; and
(ii) the preparation of 
recommendations for improving the environmental assessment procedures under the
Project.
The estimated cost of this component is US$56,000.
2.
Implementation Generally
2.1.
The Recipient shall: (a) cause the Agence de Financement des Initiatives de Base 
(AGEFIB) to carry out the Activities with due diligence and efficiency; (b) promptly 
provide the funds, facilities, services and other resources required for that purpose;
(c) furnish all information covering the Activities and the use of the proceeds of the 
Grant as IDA shall reasonably request;
(d)
from time to time exchange views with IDA's
representatives on the progress and results of the Activities; and
(e) take all 
necessary measures required to enable IDA to visit the territory of the Recipient for
purposes related to the Grant.
Without limitation on the foregoing, the Recipient
shall, if IDA shall so request, prepare and furnish to IDA promptly upon completion of
the Activities a report, in form and substance satisfactory to IDA, on the results and
impact of the Activities.
2.2.
The Recipient shall make the Grant available to AGEFIB under a subsidiary 
agreement, in form and substance satisfactory to IDA, to be entered into between the
Recipient and AGEFIB
(the Subsidiary Agreement).
The Subsidiary Agreement shall
describe the implementation arrangements, including the transfer of the Grant to
AGEFIB.
3.
Procurement
Except as IDA shall otherwise agree, procurement of the consultants
’
services
required for the carrying out of the Activities and to be financed out of the proceeds
of the Grant shall be governed by the provisions of Attachment I to this Annex.
4.
Withdrawal of Grant Proceeds
4.1.
The amount of the Grant shall be credited to an account opened by IDA on its 
books in the name of the Recipient
(the Grant Account), and may be withdrawn therefrom 
by the Recipient in accordance with the provisions of this Section
4, for expenditures
in respect of the reasonable cost of services required for the Activities and to be
financed out of the proceeds of the Grant.
4.2.
The expenditures for the following items may be financed out of the proceeds of 
the Grant and shall be used exclusively in the carrying out of the Activities:
 Amount of the
%
of
Grant Allocated
Expenditures
Item
(in US Dollars)
to be Financed
(1)
Consultants' services
240,000
100%
and audits
TOTAL
240,000
4.3.
Notwithstanding the provisions of paragraph 4.2 above:
(a)
No withdrawals shall be made from the Grant Account: (i) for payments 
made for expenditures prior to the date of signature of this Letter Agreement by IDA;
(ii) on account of payments for any taxes levied by or in the territory of the 
Recipient;
(iii) on account of expenditures in the territories of any country which is 
not a member of IDA or for services supplied from such territories; or
(iv) for the 
purpose of any payment to persons or entities if such payment, to IDA’s knowledge, is 
prohibited by a decision of the United Nations Security Council taken under Chapter
VII of the Charter of the United Nations;
(b)
No withdrawals shall be made from the Grant Account after October 31, 
2001
or such later date that IDA shall establish by notice to the Recipient
(the
Closing Date).
However, withdrawals may be made after the Closing Date for
expenditures incurred prior to the Closing Date if the corresponding withdrawal
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application is received by IDA within four months after the Closing Date, after which
time any amount of the Grant remaining unwithdrawn from the Grant Account shall be
canceled; and
(c)
If, in IDA
’s opinion, an amount of the Grant allocated to any of the
items in the table in paragraph
4.2 above will be insufficient to finance the 
expenditures for such item, IDA may, by written notice to the Recipient, reallocate to
such item an amount of the Grant then allocated to another item which, in IDA’s 
opinion, will not be necessary to meet other expenditures.
4.4.
When the Recipient shall desire to withdraw any amount from the Grant Account, 
it shall deliver to IDA a written application for withdrawal of such amount in the
form specified by IDA.
Prior to the submission of the first withdrawal application
for the Grant, the Recipient shall make available to IDA a signed copy of the
Subsidiary Agreement. Withdrawal applications shall be: (a) signed on behalf of the 
Recipient by the Minister responsible for finance or such other person as he or she
shall have authorized in writing; and
(b)
accompanied by such evidence in support of
the application as IDA shall reasonably request.
Authenticated specimen signatures of
the person authorized to sign withdrawal applications shall be provided with the first
application bearing his or her signature.
Each withdrawal application for an amount
of the Grant and its supporting evidence must be sufficient in form and substance to
satisfy IDA that the Recipient is entitled to withdraw such amount from the Grant
Account and that such amount is to be used in the carrying out of the Activities.
IDA
shall pay the amounts withdrawn by the Recipient from the Grant Account only to or on
the order of the Recipient.
4.5.
IDA may require withdrawals from the Grant Account to be made on the basis of 
statements of expenditure for expenditures under contracts for: (a) services of 
consulting firms costing less than US$100,000 equivalent; and (b) services of 
individual consultants costing less than US$
50,000 equivalent, all under such terms 
and conditions as IDA shall specify by notice to the Recipient.
4.6.
Withdrawals of the proceeds of the Grant shall be made in the currency of the 
Grant.
IDA, at the Recipient’s request and acting as an agent of the Recipient, shall 
purchase with the currency of the Grant withdrawn from the Grant Account such
currencies as shall be required to pay for expenditures to be financed out of the
proceeds of the Grant.
Whenever it shall be necessary, for the purposes of this
Letter Agreement, to determine the value of one currency in terms of another, such
value shall be as reasonably determined by IDA.
4.7.
To facilitate the carrying out of the Activities, the Recipient may open and 
maintain in CFA Francs a special deposit account
(the Special Account) in a commercial 
bank  on terms and conditions satisfactory to IDA, including appropriate protection
against set-off, seizure or attachment.
Deposits into, and payments out of, the
Special Account shall be made in accordance with the provisions of Attachment II to
this Annex.
5.
Accounts and Audits
5.1.
(a)
The Recipient shall maintain or cause to be maintained a financial 
management system, including records and accounts, and prepare financial statements in
a format acceptable to IDA, adequate to reflect in accordance with sound accounting
practices the operations, resources and expenditures related to the Activities.
(b)
The Recipient shall: (i) have the records, accounts and financial 
statements referred to in subparagraph
(a)
above and the records and accounts for the
Special Account for each fiscal year audited, in accordance with auditing standards
acceptable to IDA, consistently applied, by independent auditors acceptable to IDA;
(ii) furnish to IDA as soon as available, but in any case not later than six months 
after the end of each such year,
(A)
certified copies of the financial statements
referred to in paragraph
(a)
of this Section for such year as so audited, and
(B) an 
opinion on such statements, records and accounts and report of such audit, by said
auditors, of such scope and in such detail as IDA shall have reasonably requested; and
(iii) furnish to IDA such other information concerning said records and accounts and 
the audit thereof, and concerning said auditors, as IDA shall from time to time
reasonably request.
(c)
For all expenditures with respect to which withdrawals from the Grant 
Account were made on the basis of statements of expenditure, the Recipient shall: (i) 
maintain or cause to be maintained, in accordance with subparagraph
(a) above, records 
and accounts reflecting such expenditures;
(ii)
retain, until at least one year after
IDA has received the audit report for the fiscal year in which the last withdrawal
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from the Grant Account was made, all records
(
contracts, orders, invoices, bills,
receipts and other documents) evidencing such expenditures; (iii) enable IDA
’s
representatives to examine such records; and
(iv) ensure that such records and 
accounts are included in the annual audit referred to in subparagraph
(b) above and 
that the report of such audit contains a separate opinion by said auditors as to
whether the statements of expenditure submitted during such fiscal year, together with
the procedures and internal controls involved in their preparation, can be relied upon
to support the related withdrawals.
6.
Suspension and Cancellation
6.1.
IDA may at any time, by notice to the Recipient, suspend the right of the 
Recipient to make further withdrawals from the Grant Account if any of the following
events has occurred and is continuing: (a) the Recipient has failed to comply with any 
of its obligations herein specified; or
(b) the right of the Recipient, or any other 
entity to which the International Bank for Reconstruction and Development
(the IBRD) 
has made a loan with the guarantee of the Recipient, to make withdrawals under any
loan agreement with the IBRD or any development credit agreement with IDA shall have
been suspended.
6.2.
IDA may, by written notice to the Recipient, terminate the right of the 
Recipient to make further withdrawals from the Grant Account: (a) at any time after 
the right of the Recipient to make withdrawals from the Grant Account shall have been
suspended pursuant to the provisions of paragraph
6.1
above; or
(b) if the Recipient 
shall have failed to take action, satisfactory to IDA, within six months after the
effective date hereof, to carry out the Activities; or
(c) if IDA has decided, at any 
time after consultation with the Recipient, to withdraw its support to the Project.
Attachment I
Procurement
Section I.
Consultants’ Services
Part A:
General
Consultants’
services shall be procured in accordance with the provisions of the
Introduction and Section IV of the
"Guidelines: Selection and Employment of 
Consultants by World Bank Borrowers", published by IDA in January 1997 and revised in 
September
1997
and January
1999
(the Consultant Guidelines), and the following 
provisions of this Section I.
Part B:
Quality- and Cost-based Selection
1.
Except as otherwise provided in Part C of this Section, consultants’ services 
shall be procured under contracts awarded in accordance with the provisions of Section
II of the Consultant Guidelines, paragraph
3
of Appendix
1
thereto, Appendix
2
thereto, and the provisions of paragraphs
3.13
through
3.18 thereof applicable to 
quality-
and cost-based selection of consultants.
2.
The following provisions shall apply to consultants’ services to be procured 
under contracts awarded in accordance with the provisions of the preceding paragraph.
The short list of consultants estimated to cost less than US$
100,000 equivalent per 
contract, may comprise entirely national consultants in accordance with the provisions
of paragraph
2.7
of the Consultant Guidelines.
Part C:
Other Procedures for the Selection of Consultants 
1.
Individual Consultants
Services for the Activities under paragraph
1.1
(a) and (b) of the Annex shall 
be procured under contracts awarded to individual consultants in accordance with the
provisions of paragraphs
5.1
through
5.3
of the Consultant Guidelines.
Part D:
Review by IDA of the Selection of Consultants
1.
Selection Planning
Prior to the issuance to consultants of any requests for proposals, the proposed
plan for the selection of consultants under the Activities shall be furnished to IDA
for its review and approval, in accordance with the provisions of paragraph
1
of
Appendix
1
to the Consultant Guidelines.
Selection of all consultants’ services shall 
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be undertaken in accordance with such selection plan as shall have been approved by
IDA, and with the provisions of said paragraph
1.
2.
Prior Review
(a)
With respect to each contract for the employment of consulting firms 
estimated to cost the equivalent of US$100,000 or more, the procedures set forth in 
paragraphs
1, 2 (other than the third subparagraph of paragraph 2 (a)) and 5 of 
Appendix
1
to the Consultant Guidelines shall apply.
(b) 
With respect to each contract for the employment of individual 
consultants estimated to cost the equivalent of US$
50,000
or more, the
qualifications, experience, terms of reference and terms of employment of the
consultants shall be furnished to IDA for its prior review and approval.
The contract
shall be awarded only after said approval shall have been given.
3.
Post Review
With respect to each contract not governed by paragraph
2
of this Part, the
procedures set forth in paragraph
4
of Appendix
1
to the Consultant Guidelines shall
apply.
Attachment II
Special Account
1.
For the purposes of this Attachment:
(a)
the term "eligible item" means the item set forth in the table in 
paragraph
4.2 of the Annex to this Letter Agreement;
(b)
the term "eligible expenditures" means expenditures in respect of the 
reasonable cost of services required for the Activities and to be financed out of the
proceeds of the Grant; and
(c)
the term "Authorized Allocation" means an amount of CFA Francs 30,000,000 
to be withdrawn from the Grant Account and deposited into the Special Account pursuant
to paragraph
3
(a) of this Attachment.
2.
Payments out of the Special Account shall be made exclusively for eligible 
expenditures in accordance with the provisions of this Attachment.
3.
After IDA has received evidence satisfactory to it that the Special Account has 
been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals
to replenish the Special Account shall be made as follows:
(a)
The Recipient shall furnish to IDA a request or requests for a deposit 
into the Special Account of an amount or amounts which do not exceed the aggregate
amount of the Authorized Allocation.
On the basis of such request or requests, IDA
shall, on behalf of the Recipient, withdraw from the Grant Account and deposit into
the Special Account such amount or amounts as the Recipient shall have requested.
(b)
(i)
For replenishment of the Special Account, the Recipient shall 
furnish to IDA requests for deposits into the Special Account at
such intervals as IDA shall specify.
(ii)
Prior to or at the time of each such request, the Recipient shall 
furnish to IDA the documents and other evidence required pursuant
to paragraph
4
of this Attachment for the payment or payments in
respect of which replenishment is requested.
On the basis of each
such request, IDA shall, on behalf of the Recipient, withdraw from
the Grant Account and deposit into the Special Account such amount
as the Recipient shall have requested and as shall have been shown
by said documents and other evidence to have been paid out of the
Special Account for eligible expenditures.
All such deposits
shall be withdrawn by IDA from the Grant Account under the
eligible item(s), and in the respective equivalent amounts, as 
shall have been justified by said documents and other evidence.
4.
For each payment made by the Recipient out of the Special Account, the Recipient 
shall, at such time as IDA shall reasonably request, furnish to IDA such documents and
other evidence showing that such payment was made exclusively for eligible
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expenditures
.
5.
Notwithstanding the provisions of paragraph 3 of this Attachment, IDA shall not 
be required to make further deposits into the Special Account:
(a)
if, at any time, IDA shall have determined that all further withdrawals 
should be made by the Recipient directly from the Grant Account;
(b)
if the Recipient shall have failed to furnish to IDA, within the period 
of time specified in paragraph
5.1 (b) (ii) of the Annex to this Letter Agreement, any 
of the audit reports required to be furnished to IDA pursuant to said paragraph in
respect of the audit of the records and accounts for the Special Account;
(c)
if, at any time, IDA shall have notified the Recipient of its intention 
to suspend in whole or in part the right of the Recipient to make withdrawals from the
Grant Account pursuant to the provisions of paragraph
6.1 of the Annex to this Letter 
Agreement; or
(d)
once the total unwithdrawn amount of the Grant shall equal the equivalent 
of twice the amount of the Authorized Allocation.
Thereafter, withdrawals from the Grant Account of the remaining unwithdrawn amount of
the Grant shall follow such procedures as IDA shall specify by notice to the
Recipient.
Such further withdrawals shall be made only after and to the extent that
IDA shall have been satisfied that all such amounts remaining on deposit in the
Special Account as of the date of such notice will be utilized in making payments for
eligible expenditures.
6.
(a)
If IDA shall have determined at any time that any payment out of the 
Special Account: (i) was made for an expenditure or in an amount not eligible pursuant 
to paragraph
2
of this Attachment; or
(ii)
was not justified by the evidence furnished
to IDA, the Recipient shall, promptly upon notice from IDA: (A) provide such 
additional evidence as IDA may request; or
(B)
deposit into the Special Account
(or,
if IDA shall so request, refund to IDA) an amount equal to the amount of such payment 
or the portion thereof not so eligible or justified.
Unless IDA shall otherwise
agree, no further deposit by IDA into the Special Account shall be made until the
Recipient has provided such evidence or made such deposit or refund, as the case may
be.
(b)
If IDA shall have determined at any time that any amount outstanding in 
the Special Account will not be required to cover further payments for eligible
expenditures, the Recipient shall, promptly upon notice from IDA, refund to IDA such
outstanding amount.